CORRECTED-TIMELINE-Wells Fargo's long road to lifting $1.95 trillion asset cap
June 3 (Reuters) - The U.S. Federal Reserve announced on Tuesday that Wells Fargo WFC.N will no longer have to operate under a $1.95 trillion asset cap the regulator imposed on the bank in 2018 following its long-running sales practices scandal.
The Fed said in a statement that the bank had made "substantial progress" in addressing its deficiencies, including improving governance and risk management programs, clearing the way for the central bank to remove the unprecedented growth restriction.
Here is an overview of the bank's years-long effort to address its regulatory woes:
Date | Development |
|---|---|
September 2016 | The bank agreed to pay $185 million in penalties and $5 million to customers that regulators said were pushed into fee-generating accounts they never requested The Consumer Financial Protection Bureau received $100 million of the total penalties - the largest fine ever levied by the federal agency at the time. Los Angeles officials and the Office of the Comptroller of the Currency were also party to the settlement. |
CEO John Stumpf appeared before the Senate Banking Committee for his oversight. Later that month, the bank said it would eliminate sales goals for its retail banking business sooner than planned | |
Wells Fargo said Stumpf would forfeit equity awards worth about $41 million and not get a salary while the company's board investigates its sales practices | |
October 2016 | Veteran chairman and CEO Stumpf left. Tim Sloan took over the top job |
February 2017 | The lender said it fired four mid-level executives and stripped them of bonuses and stock awards as a result of an investigation into improper sales practices in its retail bank |
March 2017 | Wells Fargo said eight senior executives, including CEO Sloan and finance chief John Shrewsberry, would not receive cash bonuses for 2016 |
July 2017 | Federal Reserve Chair Janet Yellen said the central bank was prepared to act against the directors of Wells Fargo if an investigation deemed it appropriate |
August 2017 | Wells Fargo hiked the tally of accounts that were potentially opened without customers' knowledge by over a million after an expanded review of improper sales practices |
February 2018 | The Fed imposed an asset cap of $1.95 trillion on the bank "until it sufficiently improves its governance and controls" |
May 2019 | CEO Tim Sloan resigned, becoming the second CEO to leave the bank in the fallout of the sales practices scandal |
September 2019 | After a difficult, months-long search for a new CEO, the bank named Charles Scharf as its next leader |
January 2020 | The OCC announced civil charges against five former senior bank executives and settlements of charges with three other senior bank officials, including former CEO John Stumpf He agreed to pay a $17.5 million penalty and a prohibition from the banking industry, while Carrie Tolstedt, the former community banking head, faced a fine of $25 million and an industry ban |
February 2020 | The lender agreed to pay $3 billion to resolve criminal and civil probes into fraudulent sales practices and admitted to pressuring employees in a fake-accounts scandal |
April 2020 | The Fed said it would "temporarily and narrowly" modify the growth restriction, allowing the bank to offer more loans under government assistance programs for small businesses hurt in the pandemic |
July 2020 | Wells Fargo said Mike Santomassimo would replace John Shrewsberry as chief financial officer |
February 2021 | Fed officials privately signaled that they had accepted the bank's proposal for overhauling risk management and governance, Bloomberg News reported |
September 2021 | Fed Chair Jerome Powell said the central bank was closely monitoring efforts to fix Wells Fargo's "widespread and pervasive" problems, and would take appropriate actions if the bank failed to do so |
December 2022 | The U.S. Consumer Financial Protection Bureau hit Wells Fargo with the regulator's largest ever civil penalty as part of a $3.7 billion agreement to settle charges over widespread mismanagement of car loans, mortgages and bank accounts |
September 2023 | Carrie Tolstedt, former head of Wells Fargo's retail bank avoided prison time after pleading guilty to an obstruction charge related to the fake-accounts scandal |
February 2024 | U.S. Office of the Comptroller of the Currency terminated a 2016 punishment over sales practices |
May 2024 | Wells Fargo CEO said the asset cap imposed on the bank by regulators was curtailing its ability to take in more corporate deposits and expand its trading business |
September 2024 | A U.S. banking regulator found Wells Fargo's safeguards against money laundering and other illegal transactions were too lax and restricted its ability to expand in risky businesses |
The bank sent a third-party review of its risk and control overhauls to the Federal Reserve as it looked to remove an asset cap imposed by the regulator, Bloomberg News reported, citing sources | |
November 2024 | Wells Fargo was in the last stages of regulatory tests to lift the asset cap in 2025, Reuters reported |
The Fed must not remove Wells Fargo's asset cap until the bank has fixed its risk management and compliance issues, top Democratic Senator Elizabeth Warren told the U.S. central bank | |
December 2024 | CEO Scharf expressed more confidence in the bank's progress to fix compliance problems, detailing its efforts to implement risk controls |
January 2025 | A top U.S. consumer watchdog terminated a 2022 order punishing the lender for allegedly mishandling auto loans and mortgages |
February 2025 | The Fed terminated a pair of enforcement actions imposed in 2011, but said the bank's asset cap remained in place |
February 2025 | The OCC ended a 2018 consent order related to the bank's compliance risk management program |
March 2025 | The OCC terminated a 2021 consent order against the lender for deficiencies in its home lending loss mitigation practices |
April 2025 | The CFPB lifted a 2018 consent order related to the lender's compliance risk management |
May 2025 | The OCC terminated a 2015 consent order related to the lender's previously held financial subsidiaries |
June 2025 | The U.S. Federal Reserve announced that Wells Fargo will no longer have to operate under a $1.95 trillion asset cap |
Sources: Company statements, Reuters and media reports, regulatory filings
Related Articles
Netflix After the Warner Deal: What Investors Should Know
TradingKey - For quite some time now, Netflix (NFLX) has been regarded as the premier subscription-based streaming service in the world, with a well-established history of growth through creative use of pricing power, developing hit programming, and relying very little on outside sources for licensi
Warsh’s Fed Era Signals a Death Knell for QE, Jolting the $30 Trillion Treasury Market
With Warsh’s nomination, his past proposals for governing the Federal Reserve are being brought to the forefront. A central issue is the formulation of a new "1951 Accord" to restructure the relationship between the Fed and the Treasury. Analysts suggest such a move could impact the $30 trillion Tre
Amazon Stock Predictions for 2026 to 2030: Will They Exceed Expectations and Achieve Major Long-Term Goals?
TradingKey - As we head into 2026, many investors are questioning where Amazon (AMZN) fits into the technology world.
A Crash After a Surge: Why Silver Lost 40% in a Week?
TradingKey - Spot silver (XAGUSD) prices continue to decline. Silver plunged 20% on Thursday, breaking below $71 per ounce, with the sell-off intensifying on Friday as prices fell further below $64. Compared to the all-time high set on January 29, silver prices have retraced more than 40%, wiping out nearly all gains accumulated over the previous month.
